UK: ROBO-ADVISING CAN HELP IMPROVE DECISION MAKING
A study by the U.K. Financial Conduct Authority (FCA) concludes that individuals make better debt repayment decisions and have significantly better financial outcomes when they utilize robo-advice. Overall, investors that did not utilize financial advice when paying debt, lost 21.9% of possible savings whereas for investors that followed the robo-advice, the average savings forgone was reduced to 2.4%. The study also demonstrates that improved outcome “disproportionally benefit individuals with low financial literacy and numeracy, suggesting that robo-advising can help to level the playing field in consumer debt-management.” The study also notes that, generally, investors do not learn from prior payments, therefore robo-advice interventions need to be repeated each time consumers make choices. To learn more about the study and its conclusions, click here.